The head of the International Energy Agency (IEA) Monday said it remains to be seen how large a contributor North American liquefied natural gas (LNG) will be to the global gas market. However, Maria van der Hoeven said North American volumes won’t do much to move the supply needle in Europe.
“Many [U.S. and Canadian LNG] export facilities are in various states of development and awaiting approvals, with one in Oregon receiving federal approval last month [see Daily GPI, July 31]. But it will be some time before we see just how much North American gas makes it to the international market,” van der Hoeven said at the ONS 2014 conference in Stavanger, Norway, according to prepared remarks posted to the IEA website.
“…North American LNG has been talked up by some as a panacea for the [European] region’s supply concerns. But as I’m sure many of you in this room already know, a few tens of Bcm [billion cubic meters] of LNG will not make much difference, given that OECD-Europe production continues to fall by similar quantities.”
U.S. LNG export projects with conditional or final non-free trade agreement (FTA) export approvals from the U.S. Department of Energy total 10.52 Bcf/d (0.29 Bcm/d) in capacity (see Daily GPI, Aug. 14).
Europe needs to fend for itself in the gas market. “A broader range of measures are needed in Europe to ensure gas supplies long term, especially in light of recent conflict between Russia and Ukraine,” van der Hoeven said. “While internal infrastructure is improving and the single market is on track, continued strong gas demand in Asia and competition for LNG mean that new volumes will be hard to come by in the case of supply disruption.”
Looking to oil markets, she said “…the big supply story has been the unprecedented production growth in recent years in North America, driven by the United States, which is now the world’s No. 1 aggregate producer of oil liquids. The country is already a significant exporter of refined products, and the first condensate exports were recently approved to go to Asia [see Daily GPI, Aug. 4; Shale Daily, June 25]. Further exports remain a hotly debated topic in the United States.
“Many question how long the upward swing in U.S. light tight oil production can last, but new unconventional oil supply may come from other regions sooner than previously anticipated. Canada, Russia and Argentina are leading the pack. And Chile this month signed an agreement to begin exploring its potential.”
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